Stocks mixed as S&P and Dow pull back after hitting record highs
The major averages had a mixed day, with the Nasdaq finishing slightly higher and the Dow and S&P a bit lower after the latter two closed at record levels yesterday. U.S. markets will be closed tomorrow for the Thanksgiving holiday and will have a shortened session on "Black Friday."
ECONOMIC EVENTS: In the U.S., initial jobless claims rose 30,000 to 778,000 in the week ended November 21. Third quarter GDP growth was left unrevised at 33.1% from the advance report. The advance goods trade deficit widened to $80.3B in October. Personal income declined 0.7% in October and spending increased 0.5%, both of which were disappointing. New home sales fell 0.3% to a 999K pace in October. The University of Michigan consumer confidence survey was revised slightly lower to 76.9 in the final print for November, versus the decline to 77.0 in the preliminary reading. The durable goods report sharply exceeded estimates across the board, with a 1.3% October headline orders gain.
TOP NEWS: Shares of Slack Technologies (WORK) closed 38% higher after Cara Lombardo, Liz Hoffman and Dana Cimilluca of The Wall Street Journal said that Salesforce.com (CRM) has recently been in talks to acquire the workplace communications tool maker. Later in the day, Alex Sherman and Jessica Bursztynsky of CNBC reported, citing a person familiar with the matter, that a deal for Slack could be announced as soon as next week. Neither report made clear how much a potential deal would be worth, beyond the Journal saying Salesforce could value Slack above the $17B market capitalization at which it was trading at the time of the inital headlines of the takeover talks.
In other M&A news, Intuit (INTU) and Credit Karma announced a consent decree agreement with the U.S. Department of Justice, or DOJ, which they call "an important step" in completing their previously announced merger. Intuit and Credit Karma also announced Credit Karma has agreed to divest its Credit Karma Tax business to Square (SQ).
Additionally, ViacomCBS (VIAC) announced it has entered into a definitive agreement to sell the publishing business Simon & Schuster to Penguin Random House, a wholly owned subsidiary of Bertelsmann, for $2.18B in cash. Following the deal announcement, News Corp. (NWSA) CEO Robert Thomson weighed in with his view, stating: "There is clearly no market logic to a bid of that size - only anti-market logic. Bertelsmann is not just buying a book publisher, but buying market dominance as a book behemoth."
In earnings news, Deere (DE) reported what Baird analyst Mircea Dobre called a "strong" Q4 operating beat and gave FY21 implied EPS of about $11.50-$12.75 that was "well above" the consensus forecast. However, the shares slid 2% following the earnings report and associated conference call.
Meanwhile, Dell Technologies (DELL) and HP Inc. (HPQ) moved in opposite directions following quarterly reports from both PC makers. Dell shares slid 1%, while HP Inc. shares gained 2%.
MAJOR MOVERS: Among the noteworthy gainers was WidePoint (WYY), which rose 27% after the company announced it was awarded a Cellular Wireless Managed Services 2.0 Contract valued at up to $500M from the U.S. Department of Homeland Security.
Also higher was Fisker (FSR), which gained 35% after Citi analyst Itay Michaeli initiated coverage of the stock with a Buy rating and $26 price target.
Among the notable losers was Nikola (NKLA), which dropped 12% as investors focused on the 161M shares that are free to trade on December 1 and uncertainty around the General Motors (GM) partnership negotiations continue to weigh on investors' minds, according to JPMorgan analyst Paul Coster.
Also lower was Gap (GPS), which fell 20% after reporting earnings.
INDEXES: The Dow fell 173.77, or 0.58%, to 29,872.47
, the Nasdaq gained 57.62, or 0.48%, to 12,094.40
, and the S&P 500 declined 5.76, or 0.16%, to 3,629.65